A view of the west front of the U.S. Capitol at dawn. The Foreign Aid Transparency and Accountability Act has been approved by the United States Congress and is on its way to President Barack Obama's desk for his signature. Photo by: Architect of the Capitol

It was first introduced more than five years ago, but after many negotiations, the Foreign Aid Transparency and Accountability Act has been approved by the United States Congress and is on its way to President Barack Obama’s desk for his signature.

The legislation will require U.S. government agencies to closely monitor and evaluate all foreign aid programs based on their outcomes and improve transparency by publicly sharing the data about what’s working and what’s not, in large part through the foreignassistance.gov portal.

“I think it’s a very significant action by the Congress,” said George Ingram, a senior fellow with the global economy and development program at Brookings Institution, and the co-chair of the Modernizing Foreign Assistance Network, whose reaction to the bill was a full-voiced “Hooray.”

While many of the proposed requirements outlined in the bill are already being pursued by U.S. government agencies, the legislation sends a clear signal about the importance Congress places on aid measurement, accountability and transparency. It will also push the world’s largest foreign aid donor country to set and achieve high reporting standards that other countries can follow.

A long path

The first version of the bill was introduced in the House of Representatives in October 2011. The bill nearly passed back in 2013, but was hung up on several key concerns.

While there isn’t one specific turning point that explains why the bill passed now, its passage is being largely credited to a group of committed sponsors who worked through a series of issues over the years in the lead up to the unanimous approval in the House and Senate.

Rep. Ted Poe, a Republican from Texas, Rep. Gerry Connolly, a Democrat from Virginia, Sen, Marco Rubio, a Republican from Florida, and Sen. Cardin, a Democrat from Maryland, sponsored the bill.

Poe’s position and evolution on foreign aid has been closely watched by the global development community in Washington. In speeches on the House floor six years ago, Poe voiced criticism over international development programs, but in the process of shepherding this bill through the congressional process, he became a champion of aid effectiveness.

“The bill itself evolved a lot to achieve consensus,” said Porter Delaney, a founding partner at the Kyle House Group, who consulted for the MFAN on the legislation, adding that the core objectives of improving monitoring and evaluation and promoting improved transparency have remained.

One major challenge was writing a bill that would be cost neutral. It also took some time to reconcile language and objectives between foreign affairs and appropriations committees. Concessions were made on behalf of the NGO community and MFAN to get the bill over the finish line, according to Delaney, including leaving out security assistance from the new requirements.

Getting the relevant agencies and the executive branch on board also took time.

“These agencies tend to be fairly independent and don’t necessarily appreciate strong Congressional oversight, so it’s really a great testaments to folks’ support of transparency and evaluation,” said Lori Rowley, the director of global food security and aid effectiveness who worked as a staffer on the Senate Foreign Relations Committee in the early days of the bill.

What will it change

The global development community does not anticipate any immediate or dramatic changes, in part because many of the reforms it codifies are already underway.

But the congressional dialogue over the past several years “had a major impact on moving the executive branch more quickly, robustly,” Delaney said. Data gathering and evaluation looks far better today than it did five or six years ago, he said.

Despite being several years into the implementation of many of these policy changes there is still quite a bit of work to do, Ingram said. The quality of evaluations needs to improve and the U.S. Agency for International Development and other agencies need a stronger learning agenda and more progress towards aid transparency.

The bill is likely to accelerate the adoption of those policies and strengthen their enforcement, he said.

For example, the bill outlines that monitoring and evaluation should be paid for through program costs. USAID and the U.S. State Department already allocate 2-5 percent of program funds to monitoring and evaluation and performance management in their guidance.

While the bill itself is unlikely to boost those rates, it may well ensure that M&E budgets are allocated within programs and don’t get cut along the way in the proposal process.

“This says it’s an effective part of a development project, not a wouldn’t it be nice,” said Nora O’Connell, associate vice president of public policy and advocacy for Save the Children.

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It may also lead to more thought about evaluations and impacts before program starts, which will help develop stronger projects that are more likely to succeed, Rowley said. It should also help foster more learning, she said.

The bill puts a timeline on transparency and by making it a requirement, helps take the pressure off organizations concerned about admitting failure publicly. Few programs completely fail or succeed, but extracting the lessons will lead to better aid effectiveness and avoid duplication.

The bill will level the playing field, so even organizations already discussing these issues, feel a bit more at ease, O’Connell said.

One key piece of the bill is that it calls for evaluations to focus more on outcomes and not outputs. While this call is very much aligned with the changing nature of development, it also indicates a desire to further move to a system where impact evaluations focus less on the number of malaria nets distributed and more on how to reduce mortality rates in children under five years old.

That kind of shift to a more outcomes based measurement system puts the focus on the long-term goal, not on activities, and creates a common platform that can bring together a variety of partners to solve specific problems, O’Connell said.

The bill is also a major step towards the U.S. being fully compliant with the International Aid Transparency Index and collecting data in ways that can be easily compared with that from around the world and translated for a range of audiences.

What’s next

Once President Barack Obama signs the law, a clock starts and within 18 months the president must set forth “guidelines, according to best practices of monitoring and evaluation studies and analyses for the establishment of measurable goals, performance metrics and monitoring and evaluation plans that can be applied with reasonable consistency to covered United States foreign assistance.” That is likely to come from the next administration.

Another 18 months after that, the Comptroller General of the U.S. must submit a report to Congress analyzing those guidelines and assessing the implementation of them across the agencies and offices covered by the legislation. Reporting by the head of agencies on all covered programs isn’t required for two years, but updating the foreignassistance.gov website must happen within 90 days.

In the interim Congress will need to approve USAID’s new data information system, which will streamline the agencies processes and data collection, therefore allowing for greater transparency and compliance with the IATI standards.

Then there are the more indirect next steps and impacts. By enforcing a focus on data, monitoring and evaluation, companies now know that there will be a long-lasting market for those tools and services and are likely to invest in innovation in those areas. Likewise, USAID will need to build corresponding capacity and find and hire staff with these skill sets.

While the foreign aid data is targeted more at domestic U.S. audiences, it will be available to and can be translated for other audiences, particularly beneficiaries or citizens of recipient countries. For Oxfam, this data will prove useful as it increasingly works with partners in countries where they have a presence to use data more effectively and drive accountability, said David Saldivar, Oxfam America’s policy and advocacy manager for aid effectiveness.

An increase in data transparency may also lead to increasing policy transparency as well, and if it helps to make formulating policy more open and consultative that will be a significant added benefit, Ingram said.

The ripple effects, how well this new data will be managed, or how smoothly the implementation will go are unknowns at this point. But future American administrations won’t have a choice about whether to prioritize foreign aid measurement and transparency.

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About the author

Adva Saldinger is an Associate Editor at Devex, where she covers the intersection of business and international development, as well as U.S. foreign aid policy. From partnerships to trade and social entrepreneurship to impact investing, Adva explores the role the private sector and private capital play in development. A journalist with more than 10 years of experience, she has worked at several newspapers in the U.S. and lived in both Ghana and South Africa.

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